Exploration economics and management: a case study of gold in Nevada

Abstract

The dissertation consists of two parts. Part i maps the economic environment for gold exploration in Nevada from 1976 through 1988 and evaluates the potential for future discoveries based upon historical trends. Part II identifies organizational adaptations to the environment and measures the extent to which particular strategies, tactics and practices were associated with higher probabilities of exploration success. Cash flow models are used to evaluate the economics of Nevada gold exploration. Total exploration expenditures are estimated by year and type of company. Detailed development and production cost and revenue data from state tax reports serve as the basis for estimating annual net revenues from resulting discoveries. The two cash flow streams are integrated to estimate expected net present values and discounted cash flow- rates of return on exploration investments. These economic parameters are used to contrast the profitability of exploration for different types of organizations, to assess time trends in the economics of Nevada gold exploration and development and to predict future profitability, and are compared with the economics of gold exploration and development in other nations.